ABSTRACT OF TITLE:
A condensed version of the history of title to the land, consisting of a summary of the various links in the chain of title and a statement of all liens, charges or encumbrances affecting the property.

AGENCY:
A legal relationship in which an owner-principal engages a broker-agent in the sale of property or buyer-principal engages a broker-agent in the purchase of property.

ARM - ADJUSTIBLE RATE MORTGAGE:
A loan that allows the interest rate to be changed periodically.

APR - ANNUAL PERCENTAGE RATE:
The total finance charge -including interest, loan fees, points- expressed as a percentage of the loan amount.

AMORTIZATION:
The gradual repayment of a mortgage by periodic installments.

APPRAISAL:
An estimate of quantity, quality or value. The process through which property value is established.

ASSESSED VALUE:
"the valuation placed on property by a public tax assessor as the basis of property taxes.

ASSUMPTION OF MORTAGAGE:
Agreement by the buyer to assume responsibility for a mortgage owned by the seller - the seller remains liable to the lender unless the lender agrees to release him.

BALLOON MORTGAGE:
A mortgage that has a substantial amount of the principal due at the maturity of the note.

BROKER:
A person licensed by a state real estate commission to act independently in conducting a real estate brokerage business. Although the requirements for a broker's license vary from state to state, an individual usually must have one or more years of experience in real estate and pass an examination.

BUYDOWN:
A payment to the lender from the seller, buyer or third party causing the lender to reduce the interest rate during the early years of the loan.

CAP:
A maximum amount of interest that can be charged.

CAP RATE - CAPITALIZATION RATE:
Method of determining value of property.

CASH FLOW:
Income created by a successful investment.

CLOSING:
The final step in transferring ownership of property from seller to buyer.

CLOSING COSTS:
Funds paid by sellers and borrowers for the closing of a real estate transaction that conveys title to a property.

CONDOMINIUM:
Ownership that involves a separation of property into individual ownership elements and common ownership elements.

CONTINGENCY:
A condition that must be satisfied before a contract is binding.

CONVENTIONAL LOAN:
A fixed-rate, fixed-term loan that is made without government participation in the form of insuring -fha- or guaranteeing -va- the loan.

CO-OP - COOPERATIVE:
Hare in a co-op corporation, made up of the residents in the co-op property. The buyer owns the shares rather than owning the real property. In exchange, the buyer has a right to occupy a co-op unit.

DEED:
A legal document conveying title to a property.

EARNEST MONEY DEPOSIT:
A payment given to the seller by a potential buyer indicating the buyer's intent to complete the purchase of the property.

EQUITY:
The difference between the market value and the amount of the owner's indebtedness on a property.

ESCROW:
The placement of money and or documents with a third party for safekeeping pending the fulfillment or performance of a specific act or condition -the definition of escrow varies in different parts of the country.

FHA MORTGAGE - FEDERAL HOUSING ADMINISTRATION:
A mortgage loan insured by the federal housing administration that permits lenders to offer better terms.

FIXED RATE MORTGAGE:
A loan that has only one stated interest rate.

FORECLOSURE:
A legal process instituted by a lender to have the proceeds from the sale of a property applied to the payment of a defaulted debt.

GRM - GROSS RENT MULTIPLIER:
Method of determining value of property.

HUD - HOUSING AND URBAN DEVELOPMENT:
A united states government agency established to implement certain federal housing and community development programs.

LIEN:
A legal claim against a property such as security for a debt, a judgment, or mortgage or taxes due.

LOAN ORIGINATION FEE:
The charge paid to a lender by a borrower for processing a mortgage.

MARKET VALUE:
The highest price a ready, willing and able buyer will pay and the lowest price a seller will accept.

MORTGAGE:
A lien on real estate given by the buyer as security for money borrowed from a lender.

MULTIPLE LISTING SERVICE:
An index listing of all available properties in a given area, listing information includes asking price, type of property, tax amounts, etc.

NOI - NET OPERATING INCOME:
A property's gross income less operating expenses.

P& I - PRINCIPAL & INTEREST PAYMENT:
A periodic payment that includes the interest charges for the period plus an amount applied to amortization of the principal balance.

PITI - PRINCIPAL, INTEREST, TAXES AND INSURANCE PAYMENT:
The periodic payment that includes a principal and interest payment plus a contribution to the escrow account set up by the lender to pay insurance premiums and property taxes on the mortgaged property.

POINTS:
A dollar amount, expressed as a percentage of the mortgage amount, which is paid to a lender as a consideration for making a loan. A point is 1 percent of the amount of the mortgage loan, also called discount points.

PREPAYMENT:
Payment of a mortgage before the due date.

PRINCIPAL:
The amount of money borrowed -excluding taxes, insurance, etc.

REAL PROPERTY/REAL ESTATE:
Land, anything affixed to land which can be regarded as a permanent part of the land, and that which is immovable by law.

TITLE:
A document showing evidence of ownership.

TITLE INSURANCE:
Protection for lenders and homeowners against financial loss resulting from legal defects in the title.

TITLE SEARCH:
A review of title records to identify liens, encumbrances and ownership rights to the property.

VA MORTGAGE - VETERAN'S ADMINISTRATION:
A mortgage loan guaranteed by the veterans administration, an agency of the federal government that provides services for eligible veterans.

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